railway lines

Reaching financial settlements can be a tricky process when going through a divorce. What should you do if you and your spouse have reached an agreement before a consent order is drawn up and before the divorce has reached conditional order stage?

Until the court approves such an agreement in the body of a consent order or final financial order, the agreement reached is not technically enforceable. It is therefore sensible to make sure things progress in the most efficient way, and in a way which limits the scope for risk.

Conditional order | Financial settlements

We would normally advise people to progress with the divorce application first so that the middle point of “conditional order” is reached as soon as possible. This is because, it is not until this point that a judge can make orders regarding the financial settlement, either via the court process or following direct negotiations.

It is therefore important that the divorce moves to that point as soon as possible because otherwise, if an agreement is reached, it won’t be possible to finalise that agreement for potentially quite some time. This leaves scope for either party to change their minds or for there to be a change in circumstance which warrants reviewing the whole settlement. This will mean that the costs and time spent in dealing with that settlement or the negotiations is wasted.

What if one party pulls out of this agreement?

It will be up to a judge to decide whether an order should be made in the terms of the original agreement. There are a number of things that the judge will need to consider.

What if a formal agreement has been reached?

If a formal agreement has been reached in open correspondence with the parties having each had the benefit of legal advice, there may be an argument that the person seeking to renege on the agreement, should be held to it. If only one party is legally represented, and the other has been given the opportunity to take legal advice, but has declined to do so, but has nevertheless engaged in the formal negotiation process, this will add credence to the idea that the agreement should be adhered to. If there is a formal document in circulation, albeit unapproved by the Court, which has been largely agreed, this will add further weight to the argument. Opposed to this, if an agreement was simply reached directly between spouses, with no legal advice or without the benefit of financial disclosure, it is unlikely that anyone will be held to it.

If, however, there has been a material change in circumstance, more than just a natural fluctuation in house prices, it may be that a judge considers that the prior agreement, should not be upheld. If that is the case, it is possible that a hearing may be listed to deal with that discreet issue, with the potential outcome being that negotiations have to re-start taking into account the material change.

If you require any advice on financial settlements reached before a divorce, you should seek advice as soon as possible to ensure that the process is not hindered by the fact that the divorce has not yet commenced, or there is a risk time and expense is wasted as a result of a later change of circumstance.